Investment In Hotel Properties

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Investment In Hotel Properties

INVESTMENT IN HOTEL PROPERTIES

Investment in hotel properties consists of the following at December 31, 2019 and December 31, 2018:

	December 31, 2019			December 31, 2018
Land	$	518,243		$	518,243
Buildings and Improvements	1,710,621			1,688,459
Furniture, Fixtures and Equipment	294,527			278,098
Construction in Progress	10,202			3,804
	2,533,593			2,488,604
Less Accumulated Depreciation	(557,620		)	(461,945		)
Total Investment in Hotel Properties	$	1,975,973		$	2,026,659

Depreciation expense on hotel properties was $95,673,  $88,598 and $81,632 for the years ended December 31, 2019, 2018 and 2017, respectively.

During the year ended December 31, 2019, we acquired no hotel properties. During the year ended December 31, 2018 we acquired the following wholly-owned hotel property:

Hotel	Acquisition Date	Land		Buildings and Improvements		Furniture, Fixtures and Equipment		Other Intangibles				Total Purchase Price		Assumption of Debt
Annapolis Waterfront Hotel, MD	3/28/2018	$	—	$	43,251	$	1,802	$	(3,199	)	*	$	41,854	$	—

* Consists entirely of $3,199 of above market ground lease liability, which is recorded in the Right of Use Assets on the consolidated balance sheet as of December 31, 2019.

The above acquisition for the year ended December 31, 2018 is considered an asset acquisition under US GAAP. As such acquisition-related costs, such as due diligence, legal fees and other costs, have been capitalized and allocated to the assets acquired based on their relative fair values as of December 31, 2018. Prior to January 1, 2018, acquisition-related costs, such as due diligence, legal and accounting fees, were considered part of a business acquisition under US GAAP. As such, they are not capitalized or applied in determining the fair value of the above acquired assets as of December 31, 2017. During the years ended December 31, 2019, 2018, and 2017, we incurred $0, $29, and $2,203 in acquisition costs related to acquired assets and costs related to terminated transactions, respectively.

NOTE 2 – INVESTMENT IN HOTEL PROPERTIES (CONTINUED)

Prior to January 1, 2018, all hotel acquisitions were considered a business acquisition under U.S. GAAP. Included in the consolidated statement of operations for the year ended December 31, 2017 are total revenues of $62,147 and a total net income of $3,042 for hotels we have acquired and consolidated since the date of acquisition. These amounts represent the results of operations for these hotels since the date of acquisition as presented in the table below:

	Year Ended December 31, 2017
Hotel	Revenue		Net  Income (Loss)
Mystic Marriott Hotel & Spa, Groton, CT	$	21,247	$	1,700
The Ritz-Carlton, Coconut Grove, FL	13,390		(693		)
The Pan Pacific Hotel, Seattle, WA	13,128		493
Philadelphia Westin, Philadelphia, PA	14,382		1,542
Total	$	62,147	$	3,042

Property Damage from Natural Disaster

During September 2017, all six of our hotels located in South Florida incurred property damage and an interruption of business operations as a result of Hurricane Irma. Two of our hotels, the Courtyard Cadillac Miami and the Parrot Key Hotel & Resort, incurred significant physical damage and were closed due to the disaster. The Courtyard Cadillac Miami opened for business in the third quarter of 2018, and the Parrot Key Hotel & Resort opened for business in the fourth quarter of 2018, respectively. The remaining four properties had resumed normal business activities as of December 31, 2017. During the year ended December 31, 2018, we recorded a net gain in excess of estimated insurance recoveries of $12,649.

Hotel Dispositions

During the year ended December 31, 2019, we had no hotel dispositions. During the years ended December 31, 2018, and 2017, we had the following hotel dispositions:

Hotel	Acquisition Date	Disposition Date	Consideration		Gain (Loss) on Disposition
Hyatt House Gaithersburg, MD	December 2006	February 2018	$	19,000	$	2,441
Hampton Inn Pearl Street, NY	June 2014	March 2018	32,400		926
Residence Inn Tysons Corner, VA	February 2006	October 2018	15,700		781
2018 Total					$	4,148
Residence Inn, Greenbelt, MD	July 2004	January 2017	$	35,000	$	19,541
Courtyard Alexandria, VA	September 2006	January 2017	27,000		(1,123		)
Hyatt House Scottsdale, AZ	December 2006	June 2017	36,000		15,015
Hyatt House Pleasant Hill, CA	December 2006	June 2017	45,000		22,406
Hyatt House Pleasanton, CA	December 2006	June 2017	49,500		33,507
Holiday Inn Express, Chester, NY	January 2007	December 2017	8,400		1,004
2017 Total					$	90,350

NOTE 2 – INVESTMENT IN HOTEL PROPERTIES (CONTINUED)

Subsequent Events

On January 20, 2020, we entered into a purchase and sale agreement to sell the Duane Street Hotel to an unrelated third party for a sales price of $20,000. This transaction is anticipated to close in the second quarter of 2020.

On February 21, 2020, we entered into a purchase and sale agreement to sell the Blue Moon Hotel to an unrelated third party for a sales price of $30,000. This transaction is anticipated to close in the second quarter of 2020.